SINYUAN ZM(SZ:301398) Yong Xing Zheng Quan·2024-09-03 02:00Investment Rating - The report maintains a "Buy" rating for the company, indicating that the stock price is expected to outperform the benchmark index by over 20% [19]. Core Views - The company achieved a record high revenue in Q2 2024, with significant contributions from magnesium alloy products [6]. - The company is benefiting from the automotive lightweighting trend, which is expected to lead to simultaneous volume and price increases [8]. Summary by Sections Financial Performance - In H1 2024, the company reported revenue of approximately 183 million yuan, a year-on-year increase of about 7.11%. The net profit attributable to the parent company was approximately 37 million yuan, a decrease of about 5.00% year-on-year. In Q2 2024, revenue reached approximately 101 million yuan, up about 11.28% year-on-year and 22.73% quarter-on-quarter. The net profit for Q2 was approximately 19 million yuan, down about 12.14% year-on-year but up 9.28% quarter-on-quarter [5]. Customer and Product Insights - The company saw accelerated production from its client, SAIC Zhiji, with a total production of 17,581 vehicles in Q2 2024, representing a year-on-year increase of approximately 220.53% and a quarter-on-quarter increase of approximately 92.18% [6]. - Revenue from magnesium alloy die-casting parts reached approximately 118 million yuan in H1 2024, a year-on-year increase of about 25.87%, while revenue from aluminum alloy die-casting parts was approximately 56 million yuan, a year-on-year decrease of about 2.48% [6]. Profitability and Cost Structure - The gross margin for Q2 2024 was approximately 32.34%, a decrease of 5.91 percentage points year-on-year and 3.55 percentage points quarter-on-quarter. The net profit margin was approximately 19.1%, down 5.09 percentage points year-on-year and 2.35 percentage points quarter-on-quarter [7]. - The company is actively expanding its customer base and has secured multiple new projects, which include components for automotive display systems, central control panels, and tire support brackets [7]. Future Projections - The company is projected to achieve revenues of 500 million, 699 million, and 962 million yuan in 2024, 2025, and 2026, respectively, with year-on-year growth rates of approximately 42.1%, 39.6%, and 37.6%. The net profit attributable to the parent company is expected to be approximately 113 million, 161 million, and 227 million yuan for the same years, with growth rates of approximately 41.6%, 42.1%, and 41.0% [8][10].